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    Dutch Government pushing M&A disruption in the TMT sector - (foreign) investment control measures announced

  • EN
  • On 16 February 2016 the Dutch Ministry of Economic Affairs published a consultation draft of the legislative proposal granting the Minister the authority to prohibit or reverse takeovers in the telecom sector.

    There appears to be an increased appetite among politicians to advocate and actively pursue what is currently referred to as "economic nationalism". In the context of certain geopolitical shifts and concerns, such as Brexit, the election of president Trump, several crises within the EU, populism and cyber security threats, politicians and policymakers seem to feel a need to protect certain sectors and the businesses operating within such sectors against the undesired side effects of globalization and therefore regulate investment control. This demand is mounting in the context of certain high-profile cross-border transactions being pulled (Unilever, PostNL, and KPN) in combination with the upcoming elections. In the context of Kraft-Heinz Unilever, the leader of the Christian Democratic Alliance stated that the government's (foreign) investment control should not be limited to the telecom sector but also cover the food sector.

    Against this backdrop, the Ministry has issued a potentially far-reaching legislative proposal (the bill) that should give the government the authority to prohibit or reverse takeovers in the telecom sector.  The government has asked itself the question what the consequences are for safeguarding public policy interests if a telecom company, most notably a key digital infrastructure company like KPN, were to be the subject matter of a takeover. The government concluded that it is no longer a given that investments in the Dutch telecom sector are only being pursued for financial/economic reasons. This may in turn result in risks both from a national security and public policy perspective.

    We have prepared a note on the draft bill that can be obtained here.